“The goal of equitable distribution . . . is to effect a fair and just division of marital assets.” Steneken v. Steneken, 367 N.J. Super. 427, 434 (App. Div. 2004), aff’d as modified, 183 N.J. 290 (2005). In fixing an equitable distribution award,

a trial judge enters upon a three-step proceeding. Assuming that some allocation is to be made, he must first decide what specific property of each spouse is eligible for distribution. Secondly, he must determine its value for purposes of such distribution. Thirdly, he must decide how such allocation can most equitably be made.

[Rothman v. Rothman, 65 N.J. 219, 232 (1974).]

An award of equitable distribution is left to the discretion of the trial court and will not be disturbed on appeal “as long as the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake.” La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001).

“[V]aluation is not an exact science.” Brown v. Brown, 348 N.J. Super. 466, 477 (App. Div.), certif. denied, 174 N.J. 193 (2002). “There are probably few assets whose valuation imposes as difficult, intricate and sophisticated a task as interests in close corporations.” Ibid. (quoting Lavene v. Lavene, 148 N.J. Super. 267, 275 (App. Div.) certif. denied, 75 N.J. 28 (1977)).

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

Restricted stock and options can be distributed by way of a Callahan trust, which avoids the risk of any unfairness due to the speculative value of the assets and the potential for loss. See Callahan v. Callahan, 142 N.J. Super. 325, 329-31 (App. Div. 1976) (describing the nature and operation of the trust).

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An employer’s reasons for paying a bonus are largely irrelevant to the question of immunity of assets in the context of equitable distribution.

As the Court explained in Pascale v. Pascale, 140 N.J. 583 (1995), an asset’s immunity depends upon whether the spouse’s efforts were made during the marriage, as opposed to before or after the marriage. 140 N.J. at 609.

Immunity arises only when the employer’s forward-looking goals are implemented in a way that requires the recipient of the employment benefit to do more than he or she did during the marriage to exercise his or her right to the benefit.

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

A coverture fraction is employed when it is necessary to identify the portion of an asset attributable to efforts during the marriage and the portion attributable to efforts thereafter. Moore v. Moore, 114 N.J. 147, 166 (1989).

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“The goal of equitable distribution . . . is to effect a fair and just division of marital assets.” Steneken v. Steneken, 183 N.J. 290, 299 (2005).

Equitable distribution, N.J.S.A. 2A:34-23h; N.J.S.A. 2A:34-23.1, requires identification of the assets acquired during the marriage, assignment of value and a determination as to how to equitably allocate the marital assets between the spouses. Rothman v. Rothman, 65 N.J. 219, 232 (1974).

The party seeking to exclude all or a portion of an asset on the ground that it was not “attributable to the expenditure of effort by either spouse during the marriage” has “the burden of establishing such immunity from equitable distribution as to any particular asset.” Pascale v. Pascale, 140 N.J. 583, 609 (1995).

Determinations about equitable distribution are left to the sound discretion of the trial court judge. See Rolnick v. Rolnick, 262 N.J. Super. 343, 355 (App. Div. 1993).

When the trial court judge’s determinations are consistent with the law and not “manifestly unreasonable, arbitrary, or clearly contrary to reason or to other evidence, or the result of whim or caprice,” the Appellate Division does not disturb them. Foust v. Glaser, 340 N.J. Super. 312, 316 (App. Div. 2001).

The question is not what the members of the Appellate Division would have decided on the same record, but whether the trial court judge’s factual findings are supported by “adequate, substantial, credible evidence” in the record and the trial court judge’s conclusions are in accordance with the governing legal standards. Ibid.; see La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001) (noting that we affirm when “the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake”).

NOTE: My legal and mediation services are offered to clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.

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To learn about one couple who did not mediate, and thus are in the public spotlight, read: Wrapped in Marriage’s End, the Fate of a Team, by JENNIFER STEINHAUER, published in The New York Times.

For more information, read about Our Divorce Mediation Services.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

The courts have made it clear that the fact that a party could have done better is an insufficient basis to justify looking behind a property settlement agreement itself. New Jersey has long espoused a policy favoring the use of consensual agreements to resolve marital controversy. Konzelman v. Konzelman, 158 N.J. 185 [(1999)]. New Jersey law further finds that settlement agreements, if found to be fair and just, are specifically enforceable in equity, Schlemm v. Schlemm, 31 N.J. 557 [(1960)].

Generally, a settlement agreement may be reformed if found to be unconscionable or overreaching by one of the parties. See Addesa v. Addesa, 392 N.J. Super. 58 [(App. Div. 2007)].

Court Rule 4:50-1 provides avenues for property settlement agreements to be attacked. Courts in New Jersey are more likely to set aside a property settlement agreement if there’s been a showing of fraud, coercion or overreaching by one of the parties. See Harrington v. Harrington, 281 N.J. Super. 39 [(App. Div.), certif. denied, 142 N.J. 455 (1995)] and Peskin v. Peskin, 271 N.J. Super. 261 [(App. Div.), certif. denied, 137 N.J. 165 (1994)].

Courts have the equitable authority to modify negotiated property settlement agreements for the purpose “of ensuring fairness and equity in the dissolution of marriages.” Miller v. Miller, 160 N.J. 408, 418 (1999). See also Conforti v. Guliadis, 128 N.J. 318, 323 (1992). However, “[v]oluntary accommodations regarding matrimonial differences are highly desirable and make a major contribution to the fulfillment of ‘the strong public policy favoring stability of arrangements.’” Petersen v. Petersen, 85 N.J. 638, 645 (1981); see also Weishaus v. Weishaus, 180 N.J. 131, 143 (2004). Because they are “essentially consensual and voluntary in character,” such agreements are “entitled to considerable weight with respect to their validity and enforceability.” Petersen, supra, 85 N.J. at 642.

Applications for relief from property settlement agreements are subject to Rule 4:50-1. Miller, supra, 160 N.J. at 418. Courts are directed to use the Rule “sparingly, in exceptional situations; the Rule is designed to provide relief from judgments in situations in which, were it not applied, a grave injustice would occur.” Hous. Auth. of Morristown v. Little, 135 N.J. 274, 289 (1994). Motions under the Rule are addressed to the sound discretion of the trial court, guided by equitable principles, St. James AME Dev. Corp. v. Jersey City, 403 N.J. Super. 480, 487 (App. Div. 2008), whose decision is “left undisturbed unless it represents a clear abuse of discretion.” Hous. Auth. of Morristown, supra, 135 N.J. at 283-84.

Upon making this motion, the burden is on the moving party to set forth facts that trigger one of the Rule’s provisions. See Connor v. Connor, 254 N.J. Super. 591, 601 (App. Div. 1992). To be entitled to a hearing on a motion to reform the property settlement agreement, the applicant must provide facts in her submissions to “show that there is a genuine issue as to a material fact.” Shaw v. Shaw, 138 N.J. Super. 436, 440-41 (App. Div. 1976); see also Palmieri v. Palmieri, 388 N.J. Super. 562, 564 (App. Div. 2006). In the “absence of unconscionability, fraud, or overreaching in the negotiations of the settlement . . . no legal or equitable basis exists to reform the parties’ property settlement agreement.” Miller, supra, 160 N.J. at 419. See also Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007).

See related Blog Post, published in the New Jersey Family Law blog.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

The equitable distribution of pensions —— particularly disability pensions —— is fraught with complications and subtleties. See Larrison, supra, 392 N.J. Super. at 1 (addressing distribution of an ordinary disability retirement allowance awarded to a member of a Police and Firemen’s Retirement System (PFRS) pension); Avallone v. Avallone, 275 N.J. Super. 575 (App. Div. 1994) (confronting the problem of equitably distributing a New York state disability retirement pension upon divorce). In both cases, the court recognized that a disability retirement allowance has two components: one that represents a retirement allowance and is subject to equitable distribution to the extent attributable to marital efforts, and another that represents compensation for disability and belongs to the disabled spouse alone. Larrison, supra, 392 N.J. Super. at 16-18; Avallone, supra, 275 N.J. Super. at 584; see also Sternesky, supra, 396 N.J. Super. at 298.

NOTE: My legal and mediation services are offered to Polish-speaking and other clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.

Where the parties’ JOD or property settlement agreement omits an essential term, the court may supply “‘a term which is reasonable in the circumstances.’” Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (quoting Restatement (Second) of Contracts § 204). The Restatement explains the circumstances under which an omission of an essential term typically occurs:

The parties to an agreement may entirely fail to foresee the situation which later arises and gives rise to a dispute; they then have no expectations with respect to that situation . . . . Or they may have expectations but fail to manifest them, either because the expectation rests on an assumption which is unconscious or only partly conscious, or because the situation seems to be unimportant or unlikely, or because discussion of it might be unpleasant or might produce delay or impasse.
[Restatement (Second) of Contracts § 204(b).]

A court should supply an omitted term whenever the parties “fail[] to agree regarding an issue, generally because they did not anticipate that it would arise or [they] merely overlooked it.” Pacifico, supra, 190 N.J. at 266.

As the Court observed in Pacifico, when the parties’ property settlement agreement or JOD is silent on the valuation date, the date of sale is presumed to be the appropriate date for valuation purposes in the absence of any contrary evidence. Supra, 198 N.J. at 269.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.
My legal and mediation services are offered to Polish-speaking and other clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.
My legal and mediation services are offered to Polish-speaking and other clients in Fanwood 07023; Garwood 07027; Kenilworth 07033; Mountainside 07092; New Providence 07974; Roselle Park 07204; Roselle 07203; Elizabeth 07201; Linden 07036; Plainfield 07060; Rahway 07065; Summit 07901; Westfield 07090; Berkeley Heights 07922; Clark 07066; Cranford 07016; Hillside 07205; Scotch Plains 07076; Springfield 07081; Union 07083; Winfield; Carteret 07008; Dunellen 08812; East Brunswick 08816; Edison 08817; Jamesburg 08831; Metuchen 08840; New Brunswick 08901; Old Bridge 08857; Perth Amboy 08861; Sayreville 08871; South Amboy 08878; South River 08877; Avenel 07001; Colonia 07067; Iselin 08830; Woodbridge 07095; Somerset 08873; Somerville 08876 and Watchung 07069, New Jersey.
My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.
My Law Office is located at 726 West Saint Georges [W. St. Georges] Avenue (Route 27), Linden, Union County, NJ. Telephone: 908-486-2200; EM@IL
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